Leslie – £29bn cost of leaving Europe’s economic area

The decision by Labour’s frontbench to vote to only stay in the Customs Union but not in the European economic area could cost the UK £29 billion a year and more than 300,000 jobs by 2030.

The figures come from a report prepared by Cambridge Econometrics for the Greater London Authority on the difference in growth forecasts for a scenario in which the UK stays within the Customs Union and EEA - compared to just staying in the Customs Union.

At the same time, new polling conducted by Opinium shows Labour voters favour staying in the Single Market after Brexit by a ratio of almost three to one. The survey, conducted between May 30 and June 1, shows 55 per cent of Labour voters want to stay in the Single Market, while only 20 per cent – just one in five – supports the party leadership’s official position.

Commenting, Chris Leslie MP, leading supporter of the Open Britain campaign, said:

“Labour needs to stand up for working people across the country and these figures show that - if the Labour front bench miss this opportunity to force Theresa May to negotiate EEA Single Market participation - it will do enormous economic harm in the Midlands and the North as well as in London.

“There is still time for the Labour leadership to reconsider their position and to get behind the growing number of Labour MPs who want to vote for the cross-party amendment in support of membership of Europe’s economic area.

“The Government’s Brexit strategy in a complete mess, even Boris Johnson is warning of meltdown. It is ridiculous that Labour seem intent on bailing out the Government when so many Conservative MPs are prepared to rebel. Refusing to vote for the cross-party amendment in favour of EEA membership is a historic mistake and we won’t be forgiven if we let Theresa May get away with a hard Brexit when we have the power to stop it.”

Labour’s commitment to Brexit without the Single Market is based on staying in “a” Customs Union with the EU but leaving Europe’s economic area – while the Conservatives are committed to leaving both.

A model developed by Cambridge Econometrics shows that significantly more economic growth is lost from leaving the EEA than from leaving the Customs Union – reflecting the fact that 80% of the UK’s GDP is in services which are covered by the EEA. The Customs Union essentially covers manufactured goods.

The findings will pile pressure on MPs who have been ordered to support their party leadership’s position even though it will cost their regions billions of pounds and tens of thousands of jobs.

Based on the research, published earlier this year, Open Britain have prepared estimates for the financial loss for each part of the UK every year by 2030:

North East £1.1bn lost by 2030

West Midlands £2.4bn lost by 2030

Northern Ireland £766m lost by 2030

North West £3.0bn lost by 2030

Wales £1.3bn lost by 2030

Scotland £2.2bn lost by 2030

East Midlands £1.9bn lost by 2030

East of England £2.5bn lost by 2030

South East £3.7bn lost by 2030

Yorkshire and the Humber £2.2bn lost by 2030

South West £2.2bn lost by 2030

London £6.3bn lost by 2030.

Notes to editors

Notes on methodology:

The model was prepared for the GLA by Cambridge Econometrics. The report is here:

The GLA report says that the UK’s GDP will be 1.6% smaller in 2030 if we left the EEA and remained under a Customs Union agreement than if we stayed in both the Customs Union and EEA. Cambridge Econometrics estimate this will lead to a £6.3 billion loss (with 54,000 fewer jobs) in London and a £23.4 billion loss (and 249,000 fewer jobs) in the rest of the UK.

For the regional figures Open Britain have modelled the regional distribution of losses on a per head basis based on the projection in the GLA report for population in 2030. In order to calculate the regional figures, we have used the same population shares per region as exist on the latest ONS figures for UK population, on a regional basis, from mid-2016.